Thursday, June 1, 2006

Alaska and US Exercise Exxon Valdez Reopener Provision

The United States and the State of Alaska today submitted to ExxonMobil Corporation a detailed plan for a proposed restoration project to restore habitat in the area affected by the 1989 Exxon Valdez oil spill. The restoration plan was submitted in accord with the "Reopener for Unknown Injury" in the consent decree which settled the governments' civil claims against Exxon Corporation (now ExxonMobil), the Exxon Shipping Company and the Exxon Pipeline Company arising from the spill.  Today's submission of a plan to ExxonMobil is the first step in exercising the Reopener provision of the consent decree.  The Reopener allows ExxonMobil 90 days after submission of the proposed restoration plan before it is required to pay or respond -- this provision allows negotiations to settle a Reopener claim without litigation.

The proposed restoration project focuses on removing much of the oil that remains in the environment in a form that is potentially harmful to natural resources and disruptive of human activities.  The proposed project has two major objectives: (1) to determine the locations, approximate amounts, and chemical states of all significant residual deposits of oil from the spill in the spill area; (2) to accelerate the natural processes of degradation and dispersal of the lingering oil, or otherwise restore the oiled sites, to the greatest extent scientifically appropriate taking into account such factors as the size and distribution of lingering oil patches, conditions at the oiled sites, affected natural resources or human uses, and the relative benefits and costs (including potential adverse effects) of active remediation.The ultimate cost of the project depends upon such factors as how many oiled sites require remediation and the remediation approach selected. It is currently estimated to cost approximately $92 million. 

At the time of the settlement, Exxon agreed to pay the governments $900 million in installments for costs and for natural resource damages known or reasonably anticipated at the time of the settlement.  The settlement also included a unique provision allowing the federal and state
trustees to seek up to $100 million in additional monies for damages where a substantial loss or decline in one or more populations, habitats, or species in the area of the spill, (1) resulted from the spill; (2) the loss or decline was unknown and could not reasonably have
been anticipated by the governments; (3) one or more projects that would help restore the injured
population, habitat or species; and (4) the project costs are not grossly disproportionate to benefits.   

From Exxon Valdez Reopener Factsheet

The Exxon Valdez oil tanker ran aground on Bligh Reef in Prince William Sound, Alaska in the early morning hours of March 24, 1989.  An estimated eleven million gallons of crude oil were spilled and ultimately oiled approximately 1,750 kilometers of shoreline within the Gulf of Alaska.  The oil had devastating effects on marine wildlife and other natural resources in the spill area and disrupted the lives of residents of the spill area for many years.   

        The harm caused by the spill was extensive.  According to government scientist estimates, approximately 250,000 marine birds died from direct exposure to the oil, along with approximately 2,800 sea otters and numerous harbor seals.  Shellfish such as clams and mussels and the other animals and plants that make up intertidal communities suffered heavily both from the spill and from some of the cleanup measures.  Two pods of killer whales had extraordinarily high losses in the two years after the Spill, with oil exposure a strongly suspect factor.  Studies regarding the effects of the spill on many of these species have been and continue to be conducted under the original agreement.   

        On Oct. 8, 1991, the U.S. District Court in Anchorage accepted guilty pleas by Exxon Corporation and Exxon Shipping Company to federal environmental crimes and also approved a civil settlement resolving claims for past cleanup costs and natural resources damages with the federal
government and Alaska.  The criminal plea agreement called for a $150 million fine, of which $125 million was remitted, and the payment of $100 million in restitution, divided equally between the United States and the State. The civil settlement required Exxon to pay $900 million to both
governments over ten years.  That money has been and continues to be used for both short-term and long-term restoration projects in Prince William Sound and the Gulf of Alaska, as well as extensive research on the resources.  The purpose of those monies is to rehabilitate and restore the
resources known at the time of the settlements to have been injured. 

The Trustee Council (formed by the Departments of the Interior, Agriculture, the National Oceanic and Atmospheric Administration and the state of Alaska) adopted a formal Restoration Plan for the civil settlement proceeds in 1994, after an extensive public process.  As of 2004, the Trustee Council has remaining $145 million after expenditures for a wide variety of restoration activities, research and monitoring of injured resources, and acquisition and protection of habitat, and damage assessment activities.   Fact Sheet

Press Release

In accordance with the "Reopener" provision of the 1991
civil settlement with the Exxon Corporation, the U.S. Department of Justice
and the Alaska Department of Law today presented the company with a
proposed plan to restore shorelines in Prince William Sound and the Gulf of
Alaska that still contain oil from the 1989 Exxon Valdez oil spill.  The
State of Alaska and three federal agencies whose trust resources were
injured by the spill-the U.S. Departments of Agriculture, Commerce, and the
Interior-have estimated the project to cost approximately $92 million over
the course of several years.  The additional funding is being sought under
the "Reopener for Unknown Injury" provision of the 1991 civil settlement
which required Exxon to pay $900 million in damages at the time.   

The need for this project arises from a series of studies undertaken since
2001 that document the presence of residual oil from the 1989 spill within
the intertidal zone of beaches in the oil spill area.  At the time of the
settlement, it was not anticipated that this oil would remain toxic and
continue to impact natural resources in the oil spill area.  The proposed
project includes identifying all locations with significant amounts of
lingering oil and using advanced bioremediation techniques and other
technologies to remove the larger patches.  The governments are inviting
ExxonMobil to work with them cooperatively to develop and implement this
comprehensive project to remove the oil.   

"By sending our plan in accordance with the Reopener provision, we are
aggressively seeking to restore natural resource damages unforeseen at the
time of the 1991 settlement," said Sue Ellen Wooldridge, Assistant Attorney
General for the Justice Department's Environment and Natural Resources
Division.  "Our goal throughout this process has been to pursue all
scientifically and legally appropriate means of restoration.  Our proposed
plan is grounded in the best and most current science available, while
steadfastly adhering to the requirements of the consent decree." 

Alaska Attorney General David Marquez said, "The State of Alaska has been
engaged in a thorough analysis of potential claims under the Reopener
provision for the last seven years.  In exercising the Reopener we have
been bound by the terms of the consent decree and the

application of sound science.  After extensive review it is clear that
populations and habitat within the oil spill area have suffered substantial
and unanticipated injuries that are attributable to the Exxon Valdez oil
spill."  Attorney General Marquez added, "A couple of months ago we held a
series of public meetings in oil spill area communities to talk to the
public about the Reopener and ask for their ideas on unanticipated injuries
and how to address them.  We received many thoughtful responses.  To the
extent those ideas do not appear in the restoration plan presented to
ExxonMobil today, it is my intention to be guided by this information in
making decisions in my capacity as a trustee on the Exxon Valdez Oil Spill
Trustee Council."   

"The historic 1991 settlement provided much-needed funding to Alaska and to
the federal government for restoration, and we have made significant
progress in that effort," said Lynn Scarlett, Deputy Secretary of the
Department of the Interior.  "But we have also discovered additional
injuries caused by the spill that were not apparent at the time the case
was first settled, and these problems must be addressed.  The Department of
the Interior strongly supports today's efforts so that we can restore
injured resources in Prince William Sound and the Gulf of Alaska."   

"Natural resources of Prince William Sound, located within the Chugach
National Forest, sustained heavy impacts from the Exxon Valdez spill.  An
ongoing commitment to restore these injured lands and resources will
greatly benefit the ecosystem and marine life they support,"

said Mark Rey, Undersecretary of the Department of Agriculture.  "Both
Alaska residents and nonresidents use this area extensively for
subsistence, recreation, sport hunting and fishing activities.  Removal of
lingering subsurface oil, which remains bioavailable and toxic seventeen
years after the spill, is a necessary step in the effort to restore this

"NOAA is particularly concerned with the quantity and toxicity of the
residual oil, its impact upon intertidal communities, and its significance
for future spill response actions in sub-arctic environments," said Jim
Walpole, NOAA General Counsel.   

The proposed project focuses on determining the locations, approximate
amounts, and chemical states of all significant residual deposits of oil
from the spill in the spill area, and upon seeking to accelerate the
natural processes of degradation and dispersal of the lingering oil. 

The governments are asserting that there is a substantial loss of habitat
from relatively fresh oil that has persisted in the subsurface of certain
intertidal areas since the spill.  This loss manifests itself in two
principal ways: (1) Predators that feed in the intertidal, primarily
harlequin ducks and sea otters, show reduced survival rates in oiled versus
unoiled areas or appear to be avoiding certain locations with relatively
extensive lingering oil; (2) Subsistence users reasonably avoid harvesting
in oiled areas (and in areas they believe may be oiled) because of concerns
over contamination of shellfish or gear.  The governments assert that the
current science supports the position that the continuing bioavailability
and toxicity of the lingering oil could not reasonably have been

In further developing and implementing the restoration plan, the
governments will continue to be committed to providing public review and
allowing participation to ensure that the public is fully informed and that
its concerns are taken into account.

Biodiversity, Economics, Energy, Governance/Management, North America, Toxic and Hazardous Substances, US, Water Quality | Permalink

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